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2006 has been a great year for 'web 2.0' with the continued rise of blogs, podcasts and social networks becoming more mainstream.
The rise of 'user generated content' has been seen by many companies, brands and marketers as a great opportunity to grow a site from nothing into a world beating website.
Certainly the rise of some blogs and the sheer size of UGC funded sites like Digg.com and Myspace can lead people to believe that a UGC site will cure all ills. But when I read business plans or ideas drafts, they usually encompass the elements of build site, add UGC = Success!
But that misses so much. Building a UGC driven site is hard to master.
For starters there are so many others out there, why should someone contribute to yours?
Secondly, how are they going to find you? There is a strong chance you will have to 'buy' traffic in to start with, but at what cost? What value will you place on generating visitors?
Remember that the other part of the equation is typically 'make money from advertising', but if you don't have much traffic or quality inventory, how are you going to generate income? Who is going to sell it for you and how much are they going to charge?
There is no doubt that some UGC has a great role to play for brands and sites looking to increase user interaction and social connection, but it can't the only ingredient for site success.